AN EXTRA £2.5m will be reinvested into updating council houses over the next five years after their running was brought back under local authority control.

Charnwood Borough Council made the decision last week, five years after it previously announced it was setting up Charnwood Neighbourhood Housing (CNH) to manage its stock for the next decade.

After the council received a 0 star rating out of three for its housing development in 2006, CNH, an ‘arm’s length management organisation’ (ALMO) was set up a year later with the aim of providing a two star rating which would have unlocked around £36m worth of government funding.

However it managed just a one star in a system that has since been abandoned by the coalition government.

The council’s leader David Slater insists CNH, which runs at a cost of around £9.5m a year, has not been a failure.

“I think the only failure is not getting the £36m,” he said. “That was for a whole number of reasons.

“It’s done a fair job. There’s room for improvement, but there is always room for that.

“Bringing it back under council control is the logical conclusion as the requirement to have an ALMO does not exist anymore.”

By bringing it back under the council’s control, an independent audit states that the council is likely to save between £638,000 and £474,000 a year which it says will be added to the £60m that’s being invested in council houses over the next five years.

There will be costs in re-integrating the services including around £200k towards redundancy costs.

“There will be very few redundancies,” Coun Slater continued. “They will be where there is duplication with positions already at the council.

“I also want to say that the outcome is what the tenants want in a clear test of opinion by three to one, and it is important that our tenants are part of every discussion.”

A independent survey of residents had stated that 75 per cent were in favour of returning the housing stock to the council.

However the Overview Scrutiny Group which overlooked the council’s paper argued: “The wording used to present the two options could be considered to be weighted in favour of the option to bring the housing stock back into direct council control.”

Jamie Martin of Open Communities, an independent body chosen to represent tenants who conducted the survey, defended the wording which had stated that CNH had made ‘some’ improvements.

“Improvements to services have been made,” he said. “However from our independent perspective further services need to improve. “